The Blog

Categories

Business Models – Playing with the big boys?

If you are a small to mid-size trucking company, should you go after those contracts where you are ‘playing with the big boys’?

Sure, it sounds impressive to say we haul freight for . . . . ., but is it a good idea to even go after those huge open contracts?

Getting in the door to ship for major manufacturers can be a difficult and slow process. There will be a bid process, long time frames, equipment commitments, insurance requirements that far exceed the average, meetings and training sessions with them. Daily and monthly reports are also common. All this extra work and in the end, too many times they will even dictate the price they are willing to pay. If someone comes in below you, they willdrop you for the cheaper carrier.

With mid-size trucking companies, the major shippers can become such a large percentage of your income, that losing one contract will be devastating. If you lose that lane, or the volume is way below the original estimates provided to you, you will have equipment committed (that you are making payments on) and excessive insurance (you no longer need). These are things that are not quickly reversed!

Without intending to, I have seen too many companies put all their eggs in one basket. Try to avoid that scene.

If you are a mid-size trucking company, look for mid-size customers to compliment your services.

Look for customers that want good reliable service and provide that to them. Develop those ever so important inbound and outbound lanes to keep your trucks running steady. Work with a group of companies, not just one. Remember, you are always selling. Customers will “come and go”, so never allow yourself to become complacent. As you acquire better rates and lanes, reduce the ones that are not as profitable and shift to the better ones.